ASX NEWS & VIEWS

Nufarm Provides Full Year Results Update

Nufarm Limited announced that it expects underlying earnings before interest and tax (EBIT) forthe twelve monthsto 31 July 2018 to be approximately 5% above the previous year(FY17 underlying EBIT: $302.3 million). This comparesto the guidance of 5 to 10% growth provided at the first halfresultsrelease. The trading result has been impacted by challenging climatic conditions acrossthe key regions of Australia/New Zealand, Europe and North America.

In Australia, we have seen a continuation ofthe dry conditionsin April, with many parts of the country recording their driest April on record. Whilst it is not too late for the major cereal growing areas, there has been no break on the eastern seaboard. This haslimited pre‐plantspray opportunities, with the emphasis switching to the smaller post‐emergentspray opportunity. The dry conditions have also reduced canola plantings, with many canola seed orders being cancelled in the last two weeks.

The extended winter in both Europe and North America has delayed grower demand for our products. In the USA, the turf and ornamental business has been impacted with little to no treatments applied during the April month. The delayed start to the season placesstrain on the supply chain and may increase logistics costs, particularly in the USA.

The European Commission memberstates’ decision on April 27 to restrict the use of neonicotinoidsto indoor uses may also impact earnings. While the use restrictions do not come into effect until after the end ofthe financial year, there may be some adverse impact on salesin the current year.

The majority of Nufarm’ssalesfall into the second half, and Nufarm Managing Director and CEO Greg Hunt said that whilst the challenging climatic conditions have impacted the group’ssalesin majorregions during the key pre‐plant period, the underlying businessremainsstrong and is better positioned to withstand adverse seasonal conditions due to the transformation program the company has undertaken overthe past three years. “We will continue to manage the thingsthat we can control, and remain confident we will deliver growth more than the global crop protection market”, he said.

The delayed season will also have an impact on the phasing of net working capital, and willresult in a higher level of net working capital at 31 July as compared to the previous year. However, the expectation isfor the average net working capital to salesto remain well controlled in the 37 to 38% range.

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